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September 19, 2014

Opposition turns up heat on Erdoğan after verbal attacks on Bank Asya

Turkey's main opposition Republican People's Party (CHP) leader Kemal Kılıçdaroğlu continued to criticize President Recep Tayyip Erdoğan for his unwarranted attacks attempting to discredit Bank Asya, one of the leading national banks in Turkey.
“The president totally disregards the rule of law,” he said in an interview on Fox TV on Thursday night, stressing that no one, not even the president, can order regulators to intervene in a bank.

He was referring to Article 82 of Banking Law No. 5411, which states the Banking Regulation and Supervision Agency (BDDK), the industry's watchdog agency, is independent and that no organ, authority or person can give instructions and orders to influence the decisions of the agency.

The same law also makes it clear that anyone who intentionally damages the reputation, prestige or assets of a bank or disseminates inaccurate news shall be sentenced to between one and three years in prison.

On Tuesday, Erdoğan explicitly threatened the independent regulatory body BDDK for not taking action against Bank Asya, asking regulators to seize it. The regulators believed no such action was necessary.

He went further with his accusations on Thursday, claiming that the bank had already failed.

Main opposition leader Kılıçdaroğlu wrote a letter this week to Prime Minister Ahmet Davutoğlu, warning him about the dire consequences of targeting the bank.

“You are responsible for a new crisis that might be sparked in the banking industry,” Kılıçdaroğlu stated, lambasting him for being silent in the face of Erdoğan's verbal attacks on the bank.

Drawing attention to the prime minister's responsibility to protect banks, Kılıçdaroğlu said, “No one has the right to reward or punish a bank because of its shareholders, credit customers or accounts.”

The CHP leader emphasized that this arbitrary treatment of banks resembles a “hand grenade with its pin pulled out, ready to explode at the center of the financial system.” He added, “There will be no winners or losers in this game."

Davutoğlu did not respond to Kılıçdaroğlu's comments on the bank, instead limiting his answers to the way Kılıçdaroğlu addressed the president.

Kılıçdaroğlu lamented Davutoğlu's inaction, saying on Thursday that the prime minister will not be able to deliver what is required of him.

He said forcing the bank into bankruptcy is tantamount to an economic coup, noting that no such comments would be spoken by a responsible official in any other democratic country.

The main opposition leader accused Erdoğan of running a personal vendetta against what Erdoğan calls the “parallel structure.”

Since corruption investigations incriminated Erdoğan and members of his family in December of last year, Erdoğan has claimed that the “parallel structure,” a derogatory term for the faith-based Hizmet movement, is the proxy of unnamed foreign plotters who plan to remove him from power with the corruption allegations.

Concerned that the smear campaign may negatively affect the nation's financial and banking industry, Davutoğlu has said the speculation about the bank is ill-intentioned. He also said the rules and regulations in the banking industry are very clear and that the banking system in Turkey can withstand any crisis.

Deputy Prime Minister Ali Babacan, has asked the people to not pay any attention to statements other than those issued by regulators or authorities.

İbrahim Betil, a former banker and the founder of Bank Ekspres, also said he did not understand why President Erdoğan targets a very healthy bank with a smear campaign. He said negative statements may create a domino effect in the banking industry while eroding trust in regulators who are supposed to act independently.

In the meantime, BDDK Chairman Mukim Öztekin took two-weeks leave from the job citing health problems. The BDDK has also been under pressure from the banking industry for not being proactive in halting the attacks on Bank Asya.

Trading on Bank Asya's shares was still closed on Friday after it was suspended twice on Thursday afternoon following a radical 11 percent rise in the shares in the morning.

Trading on Bank Asya shares resumed on Monday -- following a five-week suspension -- and has decreased by more than 40 percent since then. The shares rose for the first time since trading resumed this week, increasing by 7.8 percent to TL 0.69.

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